UNITED KINGDOM AND BELGIUM (TRADE AND PAYMENTS) (Hansard, 16 March 1948)

§ Sir S. Cripps
I am glad to be able to announce that after somewhat lengthy and difficult negotiations, complete agreement has now been reached between the Belgian Government and His Majesty's Government in regard to trade and payments arrangements for the period 1st January, 1948, to 30th June, 1949.
The Anglo-Belgian Monetary Agreement, which was signed on 14th November, 1947, will, with one modification, provide the mechanism for payments between the sterling area and the Belgian monetary area; and as regards the United Kingdom, trade programmes have also been agreed for the period in question.
During the past year, the trend of payments has been moving strongly in favour of the Belgian monetary area; partly because the sterling area as a whole was in deficit, and partly because under the arrangements which were to make sterling more freely transferable Belgium had been receiving substantial sums in sterling from countries outside the sterling area with which she had favourable balances of trade.
I am circulating details of the new arrangement in the OFFICIAL REPORT, but I am sure the House will be interested to know that it has now been agreed that, although trade exchanges should be maintained at the highest possible level, payments between the two monetary areas are to be regulated in such a way that they should be brought into balance as soon as possible, thus avoiding further losses of gold by the United Kingdom. If some temporary transfer of gold is required in the early part of the period, the United Kingdom will have the right, once the desired balance is achieved, and provided that Belgian exports to the United Kingdom are maintained in accordance with the agreed programme, to repurchase later in the period any gold sold after 1st March, 1948.
I should like to take this opportunity, on behalf of His Majesty's Government, of saving that we are grateful for the cooperation and understanding shown by the Belgian Government during the recent negotiations which augur well for economic co-operation among countries of Western Europe.

§ Mr. Oliver Stanley
Naturally, until we have seen the actual terms of this agreement it is impossible to express an opinion on it, though everybody, I think, will welcome this as a further example of economic co-operation. I should like to ask two questions. First, I would like to know whether the question of tourist travel and the possibility of adding Belgium to the list that the right hon. and learned Gentleman gave earlier in Question Time was discussed, and whether any agreement was arrived at. Secondly, when he talks about repurchasing gold, does he mean that the Belgians will allow an expansion of our export trade equivalent to the amount of gold which we have bought?

§ Sir S. Cripps
Dealing with the question of the repurchase of gold, it means repurchase of the gold with sterling. Naturally, the first part of the question was considered, but in view of the fact that it is necessary, in order to get these balances, to cut Belgium exports at present, there is no opportunity of making any countervailing arrangement as regards tourist travel.

§ Mr. Langford-Holt
Can the right hon. and learned Gentleman indicate what quantities are involved as compared with last year, with regard to trade and merchandise?

§ Sir S. Cripps
Until the Joint Committee which is going to sit to see how to achieve this balance has finished its deliberations, we cannot say precisely, but we hope that it will be well maintained.

§ Mr. Henderson Stewart
Can the right hon. and learned Gentleman indicate the quantity of gold which he anticipates we shall have to sell to Belgium in the near future?

§ Sir S. Cripps
I am afraid that would not be possible.

§ Mr. H. Hynd
In view of what the Chancellor said about the tourist trade, can he not arrange for something to be done on a reciprocal basis?

§ Sir S. Cripps
No, Sir, we cannot.

§ Colonel Crosthwaite-Eyre
I want to ask, first, whether the limit of sterling to be held remains the same and, secondly, whether Belgium will remain in the Second Schedule of the Exchange Control 1889 Order or whether, under this arrangement, it will go back to the Fourth Schedule?

§ Sir S. Cripps
Perhaps the hon. and gallant Gentleman will wait until he sees the document.

§ Mr. Scollan
Can the Chancellor tell us whether the sterling balances handed over to Belgium by way of payment came from the United States of America?

§ Sir S. Cripps
I am very sorry, but I do not quite appreciate what that question means.

§ Mr. Scollan
The Minister told us that certain payments were made to Belgium for trade, and they were paid in sterling. We had to make these sterling payments. They were tendered to us, obviously, for debts contracted somewhere else. Were they sent by the United States of America or by some other country to which we owed money.

§ Sir S. Cripps
These were cases where Belgium had been doing business with some other country prepared to buy the goods in sterling. They bought in sterling and the money came through Belgium and back to this country.

§ Sir W. Smithers
When will the Chancellor realise that these bilateral trade agreements made by the Governments of two countries are detrimental to the prosperity of Britain and are impeding her recovery?

§ Sir S. Cripps
I am afraid that the only alternative to this one was a complete cessation of trade between the two countries.